PARIS (Reuters) – The French government has reached the broad outlines of an agreement with the European Commission on a state-backed refinancing plan to help strengthen Air France-KLM’s balance sheet, the Minister of Foreign Affairs said on Sunday. Finances, Bruno Le Maire.
The Mayor, speaking on LCI TV, declined to comment on the amount in question. He confirmed that the airline group’s board was due to meet on Monday to discuss and approve the package, as successive coronavirus shutdowns take their toll.
Air France-KLM, which received 10.4 billion euros ($ 12.2 billion) in government-guaranteed loans last year, discussed a multi-step recapitalization plan to alleviate debt resulting, sources said.
This will likely involve the conversion of a French state loan of 3 billion euros into hybrid instruments.
But the plan had been delayed by feuds over EU demands that Air France abandon the Paris-Orly take-off and landing slots as a condition.
The Mayor said the airline had given up some slots in the negotiations, but not the 24 initially requested by Brussels, which would have put Air France on a par with those ceded by German Lufthansa to Frankfurt and Munich in the part of its capital increase supported by the State.
“It was a long and difficult negotiation, but I think we have made a good deal with (EU competition chief) Margrethe Vestager,” said Le Maire.
France and the Netherlands each own nearly 14% of Air France-KLM, and the Dutch state has held separate talks with the EU on converting its € 1 billion loan to KLM into hybrid debt in exchange for slot concessions at Amsterdam-Schiphol.
Reporting by Sarah White and Jean-Stephane Brosse; Editing by Andrew Cawthorne and Alison Williams